The Talbott Company has received an order for 100 widgets. On January 20 the sho

Question

The Talbott Company has received an order for 100 widgets. On January 20 the shop supervisor requisitioned 100 units of part 503 at a cost of $5 per unit and 500 units part 456 at a cost of $3 per unit to begin work on the 100 widgets. On the same day 20 hours of direct labor at $20 per hour are used to work on the widgets. On January 21, 200 units of part 543 at $6 per unit are requisitioned and 10 hours of direct labor at $15 per hour are performed on the 100 units of widgets to complete the job. Overhead is allocated to the job based on $5 per direct labor hour.

What is the total job cost?
a. $4000
b. $3,900
c. $3000
d. $2,900
What is the total cost for direct labor?
a. $600
b. $500
c. $550
d. $650

Explanation / Answer

b. 3900 Direct materials part 503: 100 x 5 = 500 part 456: 500 x 3 = 1500 part 543: 200 x 6 = 1200 500 + 1500 + 1200 = 3200 Direct labor: 20 hours x $20/hr = 400 10 hours x $15/hr = 150 400 + 150 = 550 overhead: 30 hours x 5 = 150 DM + DL + OH = 3200 + 550 + 150 = 3900 c. 550 Direct labor: 20 hours x $20/hr = 400 10 hours x $15/hr = 150 400 + 150 = 550

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